Central Insurance company of Iran (CII), the regulatory body of the industry, has issued a license for a new life insurance company ‘Baran Life Insurance’ company.
Scheduled to start operation in early June, the company will offer a wide range of life insurance options and investment opportunities with focus on "innovative" and less common policies, the company 's CEO said.
"We have developed an easy procedure for selling insurance policies…By referring to our website one can easily find an appropriate life insurance and investment package that takes all risk factors into account," Alireza Hadi was quoted as saying by the company's website.
Baran Life Insurance company is the second specialized insurance company in Iran. The first was Middle East Life insurance, affiliated with Middle East Bank that made debut in 2017.
Founding and promoting specialized insurance companies was one of the measures devised by the CII to shift insurers' focus from auto and medical insurance to more profitable and innovative cover, especially life insurance that had not been very popular in the recent past.
Third-party vehicle insurance and medical insurance categories together account for almost two-thirds of industry's premium.
Insurance companies generated 66 trillion rials ($420 million) from life insurance policies sold in the last fiscal year (March 2019-20), indicating 42.3% increase compared to the year before.
Promotional Efforts
The share of life insurance is expected to reach at least 50% of the total premium. The contribution of life insurance to insurers' portfolio reached an all-time high of 14.6%, amid renewed efforts to promote life insurance among the general public.
The category generated 77 trillion rials ($481 million) in the said period, up 40% year-on-year. This share was reportedly 7.8% six years ago.
Middle East Life Insurance generated 110.8 billion rials ($687 million) in 2018-19, though the company's share from the market did not exceed 0.5% by March 2019.
According to a directive issued by the government and CII-affiliated High Council of Insurance, the minimum required capital for establishing an insurance firm is one trillion rials ($22.7 million).
Based on the directive, the minimum capital required to offer non-life insurance policies is 300 billion rials ($6.81 million), life policies 200 billion rials ($4.5 million) and mixed policies 500 billion rials ($11.36 million). This is while reinsurance firms must have a minimum capital base of 2.5 trillion rials ($56.8 million).
